New Year brings glad tidings of the Bitcoin ‘stimmy’ trade

For many people around the world, Christmas is about giving. The receiving part, however, isn’t bad.

And, while many welcomed tree-sheltered presents containing all sorts of consumer goodies on the 25th, in many corners of the US a more important gift arrived just over a week later.

Yes, we’re talking about the $600 stimulus checks agreed as part of the $900bn Covid relief bill that, after some squabbling with Donnie from Queens, was passed just before the new year. The transfers started to be paid out on New Year’s Day.

Now, we are in no doubt that a lot of Americans were in dire need of the cash. The latest unemployment reading, according to FRED, was 6.7 per cent, and that’s not taking into account underemployment or the relative lack of Federal support since the first stimulus bill passed in March. Nor, is it factoring in the much-reported Federal Reserve study from 2018 that found 12 per cent of Americans could not cover a $400 expense by any means. Which, in light of the cost of US healthcare for the unemployed, is a startling stat in the middle of a pandemic no matter which way you cut it.

For this struggling set, the $600 would have no doubt been a welcome opportunity to buy food, pay off bills and reduce their credit card debts. And, to be brutally honest, it probably isn’t enough.

But not everyone receiving the checks are stricken. And for those fortunate enough to have survived the pandemic unscathed — or even prospered through it, the $600 transfers proved an opportunity to do what Americans do best: YOLO it on speculative assets.

Except, sad face, the stock market was closed on New Year’s Day and over the weekend. So there was a distinct lack of wildly out of the money call options, electric vehicle companies and bankrupt penny stocks for punters to trade.

Bar, of course, the cryptos. Which meant only one thing last weekend: it was time to flip the “stimmy� into the coins, and lock in some gainz. If you think we’re joking, type into Twitter’s search bar the following: “bitcoin� and “stimmy�.

Here’s what we get:

If you keep scrolling down, there are thousands of tweets about flipping the stimmy into bitcoin. And, what do you know, here’s the BTC chart over the past week. See if you can spot when the stimmy started landing:

FT Alphaville also notes a brisk 11 per cent sell-off this morning during a time when most Americans are asleep. Hmmm.

Now we’re not saying this fully explains Bitcoin shooting past $34,000, but seeing as price is the primary fundamental across the asset class, thus making it an almost absolutely reflexive asset, it surely helps. After all, nothing makes someone YOLO more than watching a neighbour, colleague or friend getting rich by doing nothing. Particularly when there’s not much else to do.

The question is though, after this morning’s sell-off in Bitcoin, is the grand rotation from crypto gainz to Tesla/ Nio/ <insert vague electric vehicle company here> shares going to begin Monday?

Judging by the pre-market action in the $670bn electric car company, it might have already started:

Related Links:
Bitcoin tops $34,000 as record-breaking rally resumes — FT